Village Voice Media: 'Absolutely no' ongoing relationship between alt-weeklies and Backpage.com, financial or otherwise
The group of Village Voice Media executives who have formed a new holding company to acquire the chain's 13 weekly newspapers, thus severing their association with the controversy-clouded classified website Backpage.com, would not disclose the terms of the sale or name any of the private investors behind the newly-formed Voice Media Group.
We wondered whether those investors included (former) Village Voice Media executive editor Michael Lacey and/or chief executive Jim Larkin, the erstwhile Village Voice Media controlling shareholders who will continue to run Backpage.com as a separate entity.
"No," Lacey told Capital, reached for comment via his Village Voice Media email address.
We also asked Lacey whether the two companies would have any sort of business relationship going forward, and whether Lacey or Larkin would maintain an advisory role in Voice Media Group.
"Absolutely not," he said.
And so it would seem that this is a clean break for the Village Voice brand and Backpage, which had become a liability for the newspapers because of the whirlwind of negative press about Backpage's alleged ties to child-sex trafficking. It also means the alt-weeklies will be forced to operate without that special stream of revenue shoring up the bottom line. But how significant is not clear, since executives would not release any information about the alt-weeklies' financials.
Backpage has been implicated over the past two years in more than 30 sex-trafficking prosecutions in New York alone, but was nonetheless a lucrative platform for Village Voice Media classified advertising, thereby creating a broad revenue stream for the company, whose print and digital publishing operations have been hit hard along with the rest of the news industry. Layoffs have been a constant among the newspaper chain's dozen-plus titles over the last two years, even with a corporate parent that had that classified ad revenue. (Locally, The Village Voice's editor-in-chief of the past six years is leaving the paper to work on a book about Scientology. The search is on for Ortega's replacement.)
Backpage.com made an estimated $28.9 million in the 12-month period ending Aug. 31, 2012, according to AIM Group, a media consultancy focused on online classified advertising. Executives of the new publishing company (without releasing figures) told news outlets that the newspapers and their websites could be self-sufficient without that revenue.
Liz McDougall, an attorney for Village Voice Media, has defended Backpage on multiple grounds, arguing for instance that sex-trafficking is a scourge too widespread to ascribe blame to any one website, and that shutting down a well-monitored platform such as Backpage would only drive business to seedier offshore sites that do not cooperate with law enforcement.
But McDougall, who did not respond to a request for comment Monday morning, wasn't able to reverse the tidal wave of outrage that social-justice activists set off through a combination of aggresive P.R., grass-roots protests and direct communication with major brands like H&M, IKEA and AT&T, which are among dozens that pulled out of Village Voice Media.
UPDATE: McDougall got back to us, but would not comment beyond Village Voice Media Holdings' official statement on the sale: "After more than forty years of dedicated journalism ... Jim Larkin and Michael Lacey, who founded Village Voice Media Holdings, are ready to move on and hand the reins to a new generation of writers, editors and publishers. Backpage.com, which is not included in the transaction, will become the centerpiece of a new online classified advertising company with business worldwide."
A spokesman for Groundswell, meanwhile, the interfaith clergy coailtion that led the charge against Backpage, was preparing a statement when reached for comment. We'll update when we receive it.
Larkin and Lacey, for their part, explained their decision to sell the papers so that they can devote themselves to operating and defending Backpage.
"This particular fight is important and not one that we intend to abandon," they wrote in an email to colleagues published on the website of Miami New Times. "At the same time, Backpage's battles are an enormous distraction to publishers, editors and readers of Village Voice Media."
CORRECTION: Due to an editing error, this item originally stated that Backpage.com made an estimated $268 million in the 12-month period ending Aug. 31, 2012. The correct figure is $28.9 million. We regret the error.